Hotel hosting MegaLuck casino Jeju to sell
The operator of the Jeju KAL hotel (pictured) in Jeju, South Korea intends to hand over ownership, according to a letter from hotel management to a union seen by GGRAsia.
This step raises questions about the future location of the MegaLuck Casino, a foreigner-only gambling venue within the hotel.
MegaLuck is operated by Hong Kong-listed New Silkroad Culturaltainment Ltd, which calls the casino an “entertainment business”. This segment recorded no income in the six months through June 30 of last year, according to the operator’s interim report, filed in September. This was his most recent round of published results.
Jeju, which has a number of foreign-only casinos, has, like other Asian tourist destinations, seen its inbound foreign tourism activity severely affected by travel restrictions linked to the Covid-19 pandemic.
In 2020, New Silkroad reserved only 391,000 HKD (US $ 50,148) of revenue from external customers for its entertainment business, and recorded a segment loss of HKD 64.8 million.
GGRAsia has approached management at MegaLuck and New Silkroad, regarding information given to the union about the hotel divestiture, but they declined to comment.
KAL Hotel Network Ltd (KHN), the operator of the hotel, said in a January 4 letter to the KAL Hotel branch of the Jeju Tourism Services Union, that a decision to sell the hotel had been made by KHN’s board of directors on December 23, “to overcome financial difficulties”. The letter did not specify the time of the transfer, the name of an acquiring entity, or any considerations that might be involved.
On Tuesday, the hotel’s room reservation website was only accepting reservations until March 31.
According to a union representative interviewed by GGRAsia, the rental agreement between MegaLuck and Jeju KAL Hotel is renewable annually, with six months’ notice required for termination. The current hotel operator informed casino management in September last year regarding the possible transfer of the property, according to the union.
The head of that union branch told GGRAsia that about 60 employees at MegaLuck Casino who are not actually union members approached him, expressing concern about the future of their jobs.
A representative of Korean Air Co Ltd, the parent company of KHN, told GGRAsia by phone that the timing of the divestiture process has not yet been set.